Republic
of the
SUPREME
COURT
SECOND DIVISION
|
VIVIAN
Y. LOCSIN, YAO SHIONG SHIO, OSCAR MANUEL, RAMON LINAN, PAZ Y. FLORES, for and
on their own behalf, and SIXTO O. RACELIS, for and on behalf of ORIENTAL
PETROLEUM AND MINERAL CORPORATION, Petitioners, -
versus - THE
HONORABLE SANDIGANBAYAN, PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, ASSET
PRIVATIZATION TRUST, REV. EMETERIO BARCELON, S.J., EDUARDO F. HERNANDEZ,
GUILLERMO PABLO, JR., AMPARO BARCELON, ANTONIO CAGUIAT, RAMON A. PEDROSA,
JAIME L. LEDESMA, SIMPLICIO J. ROXAS, VALERIANO FUGOSO, WILFREDO SAŃARES,
ULTRANA MINERALS CORP., INDEPENDENT REALTY CORP., PERFORMANCE INVESTMENT
CORP., MID-PASIG LAND DEVELOPMENT CORP., FABIAN VER, PIEDRAS PETROLEUM CORP.,
and RIZAL COMMERCIAL BANKING CORPORATION, Respondents. |
|
G.R. No. 134458 Present: QUISUMBING,
J., Chairperson, CARPIO, CARPIO
MORALES, TINGA,
and VELASCO,
JR., JJ. Promulgated: August
9, 2007 |
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO, JR., J.:
The Case
Before
us is a petition[1] of
a special civil action for certiorari under Rule 65 imputing grave abuse of
discretion on the Sandiganbayan (SB) First Division when it denied, through its
March 21, 1990 Resolution,[2]
admission of petitioners’ Amended Complaint[3]
in S.B. Case No. 0042 in connection with their quest to recover shares of
Oriental Petroleum and Minerals Corporation (Oriental) from alleged dummies and
nominees of former President Ferdinand E. Marcos. Likewise challenged is the
The Facts
Individual
petitioners are stockholders of petitioner Oriental. Oriental is engaged in the exploration,
development, acquisition, financing, and management of petroleum and mineral
resources. Of note, it gave the
On May
5, 1988, petitioners Yao Shiong Shio, Oscar Manuel, and Ramon Linan filed a
Complaint[5]
docketed as Civil Case S.B. No. 0041 for Declaration
of Nullity of Presidential Commission on Good Government (PCGG) Deed of Sale,
Sequestration Orders, Prayer for Issuance of Temporary Restraining Order and/or
Preliminary Injunction and Appointment of Receiver, with Damages against
most of the respondents. The case was
raffled to the SB First Division.
On
On
On
On
On the
other hand, respondents corporations were those wherein the shares allegedly
illegally obtained by former President Marcos were placed, and from which the
disputed shares were taken or sequestered by respondent PCGG. In addition, the Rizal Commercial Banking
Corporation was impleaded in its capacity as the transfer agent of Oriental
through which the disputed shares would be transferred to respondents
corporations and which petitioners
sought to enjoin through the prayed for injunctive writ.
On
The SB
Third Division explicated its
The
issue was precipitated by the manifestation of the defendants that the filing
of this case smacks of “forum-shopping” within the divisions of this court as
the complaint is practically a repetition
of the allegation in the complaint in Civil
Case No. 0041;
The
records of said Civil Case No. 0041 show that after the First Division denied
the plaintiffs’ prayer for preliminary injunction/restraining order in its
resolution of May 23, 1988, plaintiffs through another panel of lawyers, filed
an amended complaint dated July 6, 1988, but later filed a Notice of Dismissal
of both the original and amended complaints of July 27, 1988. The First Division approved the dismissal on
Petitioners
do not deny that the complaint in Civil Case No. 0042 is a substantial
petition/consolidation of the allegations and prayer in the original and
amended complaint in Civil Case No. 0041. They nevertheless maintain that the
assignment of this case to the Third Division as a result of a raffle conducted
by the Sandiganbayan is final and conclusive.
Pursuant
to the
Petitioners’
Complaint,[7]
docketed as Civil Case S.B. No. 0042, alleged that Oriental and its
stockholders were victims of former president Marcos and his cronies who
acquired three blocks of Oriental stocks at various times either without or for
inadequate or unlawful considerations, as summarized by the Sandiganbayan, to
wit:
1. In 1970, One
(1) Billion Class “B” Shares
One Billion
class “B” shares (intended to be sold in
Consideration:
allegedly none, except for a fictitious downpayment of P100,000.00 or 1% (while
other subscribers allegedly paid 25%) of the total subscription price – fictitious because the money supposedly came
from ORIENTAL PETROLEUM itself.
Of these, 1
million shares were allegedly sold by STAR MANAGEMENT in 1971, while the
remaining 999 million shares were transferred by STAR MANAGEMENT to ULTRANA
upon instruction of ex-Pres. Marcos. The
original subscription contract of ORIENTAL with STAR MANAGEMENT was cancelled
and a new one entered with ULTRANA at no consideration to ORIENTAL.
In the first
week of March 1976, 800 million shares were transferred by ULTRANA to the
Independent Realty Corporation and 199 million shares to Vincent Recto.
As of the
filing of this suit, the remaining balance subject of the instant suit stands
at 162 million shares with Independent Realty Corporation.
2. In 1976, 1.85
Billion Class “B” Shares
These were
allegedly acquired by ex-Pres. Marcos through simulated transactions and were
distributed upon his instruction as follows:
1.000 Billion : Performance Investment
Corp.
840 Million : Mid-Pasig Development Corp.
10 Million : Fabian Ver
1.850 Billion TOTAL
==========
at a subscription price at P0.01 per
share with downpayment at 25% of total value, even if the price at the stock
market was averaging at P0.10 per share.
3. In 1978, 2.5
Billion Shares
These were
allegedly issued after ORIENTAL had been forced by Marcos to increase its authorized
capital stock, supposedly in exchange for 2.5% interest in the Service Contract
over the Nido and the Matinloc Oil Mills (Service Contract No. 14). These shares were later found to have been
put in the name of Piedras Petroleum Corporation.[8]
The 2.5
billion shares issued to Piedras Petroleum Corporation (Piedras) consisted of
PhP 1.5 billion Class “A” shares and 1 billion Class “B” shares.
Due to
subsequent sales and transfers, as of April 1986, only around 4.5 billion
shares remained in the names of the alleged Marcos cronies, which are now the
disputed shares, to wit:
Independent Realty Corp. - 162,230,000 shares
Performance Investment Corp. - 1,000,000,000
Mid-Pasig Development Corp. - 840,000,000
Fabian Ver - 10,000,000
Piedras - 2,500,000,000
Total - 4,512,230,000 shares
===============
Through
an April 10, 1986 Sequestration Order,[9]
the PCGG sequestered all the above shares except those of Piedras which was
done a few days later through a second Sequestration Order[10]
dated
With
the sequestration of the disputed shares, petitioners further alleged that PCGG
took control of the Board of Directors and the management of Oriental. They averred that the PCGG nominees, individual
respondents except Fabian Ver, set into motion a grand scheme to raid and
systematically plunder Oriental.
Petitioners proceeded to outline the alleged acts committed by the PCGG
nominees using fraud and deceit to enrich themselves at the expense of
Oriental.
After
the SB First Division received Civil Case S.B. No. 0042 from the Third
Division, it proceeded to conduct hearings on the prayer for the issuance of
the injunctive writ. On
The
complaint as well as the affidavit of plaintiff Oscar Manuel dated
x
x x x
No
additional details are given on how Marcos acquired the second set of shares of
stock in ORIENTAL PETROLEUM except that:
14. The 1.85 billion shares of ORIENTAL were
transferred by means of “simulated transactions” which were “forced (upon)
Oriental’s Management” (Affidavit, par. 12; see also par. 2.10.1, Complaint).
15. The third block of ORIENTAL shares were
allegedly obtained by Pres. Marcos through a “systematic abuse of power” where
Marcos forced ORIENTAL to increase its authorized capital and to issue 2.5
billion shares to an undisclosed entity in exchange for 2.5% in the Service
Contract No. 14 for the Nido and the Matinloc wells. (par. 13,
Affidavit; par. 2.11 Complaint).
Eventually,
this undisclosed entity turned out to have been Piedras Petroleum Corporation.
While
all these shares appear to have been sequestered in April of 1986, the PCGG by
its letter dated
x
x x x
As
pointed out above, plaintiffs have confined themselves to describing the
transfer of 1.85 billion shares in 1976 as one made through “simulated
transactions” forced upon ORIENTAL’s management and the exchange of 2.5 billion
shares with a portion of Service Contract No. 14 through a “systematic abuse of
power,” without mention of any further details thereof as to how indeed this
abuse of power took place.
x
x x x
Thus,
the right of plaintiffs either by themselves or in representation of ORIENTAL
over the shares in question are not clear as to justify a restraint upon the
PCGG or upon the Republic in acting on the shares which, even to plaintiffs,
are admittedly “ill-gotten.”[14]
Prompted
by the above disquisition, on
The
Answers have already been filed. What
this proposed amended complaint seeks to do is to allege additional facts in
order to supply the missing or omitted data which omission had resulted in the
denial by this Court of the petition for the issuance of the writ of
preliminary injunction. In fact, the
alterations in the prepared amended complaint are such that the statement of
the wrong done has been substantially altered from that which originally
confronted the defendants and this Court.[17]
On
Hence,
the instant petition for certiorari is filed with us attributing grave abuse of
discretion on respondent anti-graft court for the rejection of petitioners’ amended
complaint.
In the
meantime, the following relevant events transpired pending the instant action
for certiorari:
First,
private respondent Eduardo F. Hernandez, a former officer and director of
Oriental, was cleared by us of any wrongdoing relative to the sale of the 999
million shares by the PCGG to the Barcelon-Ultrana Group. In Eduardo F. Hernandez v. Deputy
Ombudsman for Luzon, et al. docketed as G.R. No. 101967, through a May 5,
1992 en banc Resolution,[20] we
ordered the Ombudsman to modify its September 3, 1990 Resolution and August 14,
1991 Order to exclude respondent Eduardo F. Hernandez from the
Information. We reiterated this same
ruling in an en banc Resolution[21]
issued on November 19, 1992 in Rev. Fr. Emeterio Barcelon, S.J., et al. v.
Deputy Ombudsman for Luzon, et al., docketed as G.R. No. 101326, and Eduardo
F. Hernandez v. Deputy Ombudsman for Luzon, et al., that as regards Hernandez,
there is no prima facie evidence to hold him probably liable for
conspiracy relative to the sale of 999 million shares of Oriental stocks to the
Barcelon-Ultrana Group by the PCGG.
Indeed,
respondent Hernandez earlier filed his motion to dismiss dated
Second,
pursuant to Administrative Order No. (AO) 241[23] issued
on October 4, 1991 by then President Corazon Aquino, which provided that APT’s
control and administrative responsibilities over recovered ill-gotten wealth are
terminated upon the return to the PCGG of said properties, respondent APT returned
to the PCGG the 1,004,230,000 shares of Oriental it earlier received, which is the
subject of the instant case. Thus,
respondent APT contends that the questioned transfer of said shares is now moot
and academic.
Third, the
term of existence of APT expired on
Fourth,
respondents Antonio Caguiat and Valeriano Fugoso reportedly passed away.
On
On the
other hand, respondent Valeriano Fugoso died on
The
Issues
Petitioners
raise the following issues for our consideration:
I
WHETHER THE PRESENT PETITION
SHOULD BE DISMISSED FOR FORUM-SHOPING AND RES JUDICATA.
II
WHETHER PRIVATE RESPONDENT
ASSET PRIVATIZATION TRUST (NOW PRIVATIZATION AND MANAGEMENT OFFICE) SHOULD
REMAIN A PARTY IN THIS ACTION.
III
WHETHER THE HONORABLE
SANDIGANBAYAN ACTED WITHOUT OR IN EXCESS OF JURISDICTION, OR WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, IN DENYING THE ADMISSION OF
THE AMENDED COMPLAINT DATED
A. WHETHER THE PROPOSED AMENDMENT SUBSTANTIALLY ALTERS
PETITIONERS’ CAUSE OF ACTION.
B. WHETHER THE PROPOSED AMENDMENT WILL PREJUDICE
C. WHETHER THE PROPOSED AMENDMENT SHOULD BE ALLOWED.[31]
The
Court’s Ruling
Core issue of grave abuse of
discretion
Petitioners strongly contend that respondent
court gravely abused its discretion amounting to lack or excess of jurisdiction
in denying admission of their proposed amendments. They argue that the proposed changes do not modify
their cause of action and neither do they prejudice respondents who will be
given ample time to answer considering that the trial of the instant case has
not yet commenced. In asserting that
their cause of action remains the same, petitioners point out that the proposed
amendments do not change their allegations as the amendments only detailed,
amplified, and made in express terms the same alleged transactions that are the
subjects of the controversy and which were impliedly alleged in the original
complaint, citing Rubio v. Mariano.[32]
Petitioners asseverate that in the
interest of justice, and in consonance with the spirit of the law, amendments
to pleadings are allowed at any stage of the action to avoid multiplicity of
suits and, more importantly, to accord the parties to present the real
controversy for the proper determination of the parties’ rights and the case
decided on the merits without unnecessary delay. Moreover, they point that in a line of cases,
this Court had favored amendments to pleadings, as the rules on them, which are
permissive in character, are liberally construed without regard to
technicalities.[33] Petitioners rely on Sedeco v. Court of
Appeals[34] and Paman
v. Diaz[35] which
applied the liberality of the rules as regards admittance of amendments, and Marini-Gonzales
v. Lood[36] where
we allowed admittance of amendments to the pleading despite the result that it
substantially altered the theory of the case, in furtherance of justice. Finally, petitioners argue that the amended
complaint will not prejudice nor place respondents at a disadvantage as they will
be accorded time to answer the amended complaint, and thus can prepare
sufficiently for trial considering that the trial proper has not yet commenced.
For their part, respondents countered
that petitioners’ proposed amendments indeed constitute a substantial change of
the cause of action. They aver that the
proposed amendments were pursued in order to delay the instant case since what
have been proposed could be well ventilated during trial with testimonial evidence
and proper representation.
The principal issue to be resolved in
the instant action is whether the SB committed grave abuse of discretion
correctable by certiorari in denying the admission of petitioners’ proposed amended
complaint.
We answer in the negative.
Trial court granted sound discretion in the admittance
or denial of proposed amendments to pleadings
The Revised Internal Rules of the SB
does not provide for amendment of the initiatory pleading. Thus, the pertinent
provisions of the 1997 Revised Rules of Civil Procedure apply in a suppletory
manner.
Rule 10 of the 1997 Revised Rules of
Civil Procedure shows how a pleading is amended, thus:
SEC.
2. Amendments as a matter of right.––A
party may amend his pleading once as a matter of right at any time before a
responsive pleading is served or in the case of a reply, at any time within
ten (10) days after it is served.
SEC.
3. Amendments by leave of court.––Except
as provided in the next preceding section, substantial amendments may be
made only upon leave of court. But such leave may be refused if it appears
to the court that the motion was made with intent to delay. Orders of the court upon the matters provided
in this section shall be made upon motion filed in court, and after notice to the
adverse party, and an opportunity to be heard.
(Emphasis supplied.)
In the case at bar, the individual respondents
had already filed their respective answers with the respondent court when
petitioners filed their motion for leave to admit amended complaint. Thus, Sec. 3 squarely applies to the amended
complaint and hence, leave of court is required.
It is clear from the aforequoted Sec.
3 that the trial court is accorded sound discretion to grant or deny the
admission of any proposed substantial amendments to a pleading, like a
complaint as in the instant case. The
rule expressly provides that the proposed amendments are refused admittance if
it appears that these are substantial and were made to delay the case. Generally, where the trial court has
jurisdiction over the case, proposed amendments are denied if such would result
in delay,[37] or
would result in a change of cause of action or defense or change the theory of
the case,[38] or are
inconsistent with the allegations in the original complaint.[39]
Are the proposed amendments
substantial? Will the proposed amended
complaint result in delay?
The answer is in the affirmative.
The court a quo, in denying
the amendment of the complaint, found that the proposed amendments are
substantial, and also took into consideration the possibility of delay in the
processing and adjudication of the case if the modified initiatory pleading is
allowed.
Proposed amendments are substantial
Petitioners
wanted to incorporate the following amendments into a bid to show details on
how the 1.85 billion shares (second block) and the 2.5 billion shares (third
block) of Oriental were allegedly extorted by Marcos and his cronies through
simulated transactions and systematic abuse of power:
(a) With regard to the parties, petitioners wanted to insert John Does[40]
as defendants, and to highlight the capacity of plaintiffs as stockholders
allegedly not privy to the assailed transactions;[41]
(b) The gargantuan amendments were proposed in
the allegations common to all causes of
action where petitioners wanted to insert a historical background and other
allegations emphasizing that a large portion of plaintiff Oriental’s
unsubscribed capital stock were allegedly taken illegally by Marcos and his
cronies through the initial issuance of 1 billion shares, and the subsequent issuances
of an additional 1.85 billion shares and 2.5 billion shares;[42]
(c) In standing
to sue, petitioners wanted to insert in paragraphs 3.02, 3.05, and 3.07
some statements to emphasize their standing and right to recover what were
allegedly illegally taken from Oriental through duress or extortion;[43]
(d) On the jurisdiction
of the Sandiganbayan, petitioners wanted to insert the statement that it is
absurd to seek relief from the PCGG which is the adverse party;[44]
(e) In the first
cause of action, petitioners wanted to add averments that PCGG’s claim over
the subject shares based on Campos’ affidavit is illegal as Campos did not own
the shares;[45]
(f) In the second
cause of action, petitioners wanted to insert the averment that E. Barcelon
was remiss of his task to recover the subject shares by unlawfully usurping the
opportunity to acquire them at a bargain;[46]
(g) In the third
cause of action, petitioners wanted to add the averment which is a mere
reiteration of the proposed amendment in the first cause of action that Campos’
affidavit did not confer to PCGG or the Government ownership over the subject
Oriental shares;[47]
(h) In the fourth
cause of action, petitioners wanted to add the averment of the PCGG’s
alleged consistent stance that Marcos unlawfully accumulated wealth by
confiscating businesses and taking undue advantage of his powers;[48]
(i) In the fifth
cause of action, petitioners wanted to insert the averment of the alleged
nullity of the exchange of 2.5 billion Oriental shares with 2.5% interest in
Service Contract No. 14 allegedly admitted by the PCGG in the Racketeering
Influenced Corrupt Organizations case, that Oriental is one of the corporations
controlled by Rolando Gapud for Marcos.[49]
The
foregoing proposed amendments carefully considered the original complaint,
particularly the addition of defendants John Does or whoever succeeded private
respondents as Officers and Directors of the Board of Oriental, and the
proposed new factual allegations common to all causes of action. We agree with
the SB that the proposed amendments are substantial.
Proposed amendments will cause delay
Moreover, respondent court took into
consideration the fact that the 19 defendants have already filed their
answers. To entertain the amended
pleading will put back the case to square one.
Some or all the defendants may file motions to dismiss anchored on
grounds that spring from the new averments of the amended complaint. Those dissatisfied with the rejection of
their pleas for dismissal will file motions for reconsideration which if denied
may opt to elevate the issues to the Court of Appeals (CA). If their petitions were denied by the CA, then
they may decide to still ask this Court to rule on their postulations. Without doubt, these proceedings will take years
and obnoxious delays will have set in.
Particular note should be taken of
the inclusion of John Does as party-defendants. Petitioners, upon knowing the
identities of persons who replaced the directors and officers of Oriental, will
ask for their addition as defendants.
This joinder of additional parties will further cause delay.
Even if the defendants will not
resort to a motion to dismiss, some, if not all, will surely ask motions for
extensions of time to file their responsive pleading due to the substantial and
myriad details incorporated in the amended complaint. Again, a prolongation of the events in a case
will be experienced.
Moreover, the SB found that the real
objective of petitioners in amending the complaint is “to supply the missing or
omitted date which omission had resulted in the denial x x x of the petition
for the issuance of the writ of preliminary injunction.” In short, what the court a quo found
is that the whole exercise of amending the complaint is not to correct or
enhance the alleged ultimate facts in the original complaint but to supply
evidentiary support to their prayer for injunction. Although rebuffed several times, petitioners
may possibly reiterate their plea for the injunctive writ, now using the
modified averments in the complaint.
The Court agrees with the foregoing
findings.
Sec. 1, Rule 8 of the Rules of Court is
clear:
Section
1. In
general.—Every pleading shall contain in a methodical and logical form, a
plain, concise and direct statement of the ultimate facts on which the party
pleading relies for his claim or defense, as the case may be, omitting the
statement of mere evidentiary facts.
Ultimate facts mean the important and
substantial facts which either directly form the basis of the plaintiff’s
primary right and duty or directly make up the wrongful acts or omissions of
the defendant.[50]
On the other hand, eminent jurist
Florenz Regalado elucidates that:
“Evidentiary
facts” are those which are necessary to prove the ultimate fact or which
furnish evidence of the existence of some other facts. They are not proper as allegations in the
pleadings as they may only result in confusing the statement of the cause of
action or the defense. They are not
necessary therefor, and their exposition is actually premature as such facts
must be found and drawn from testimonial and other evidence.[51]
It is clear from the many proposed
changes in the complaint that said averments pertain to evidentiary facts and
are not essential components of the ultimate facts of petitioners’
complaint. This conclusion results from
the admission of petitioners that the “proposed amendments only detail[ed],
amplified and made in express terms the same wrong with respect to the same
alleged transactions that are the subject of the controversy.” Being merely evidentiary facts, the proposed
amendments then are unnecessary to justify admission by the SB.
In the light of the foregoing
considerations, the Court does not see how the SB gravely abused its discretion
in disallowing the amended complaint.
Such
alleged error of judgment in denying the motion to admit amended complaint
cannot be considered as grave abuse of discretion correctable by certiorari. Certiorari is not available to correct errors
or mistakes in a tribunal’s findings and conclusions of law and fact. Moreover, the denial of a motion to admit
amended complaint, being interlocutory, cannot be questioned by certiorari. It cannot be the subject of appeal, until a
final judgment or order is rendered.[52]
The
proper remedy against an order denying a motion to admit amendments to a
pleading is to continue with the trial and interpose the proper testimonial and
documentary evidence to prove ultimate facts that are supposed to be included
in the amended complaint. It is only in
the presence of extraordinary circumstances evincing a patent disregard of
justice and fair play where resort to a petition for certiorari is proper.[53]
Petitioners still have
other available remedies sans amendments
One
last point. Petitioners are not entirely
without an adequate remedy if their only objective in amending the complaint is
to provide details or amplification to their allegations in the original
complaint. On
In
Rule 18 and in the pre-trial guidelines, the parties are required to submit
pre-trial briefs which should contain a summary of admitted facts and proposed
stipulation of facts and a list of documents or exhibits to be presented.[54] Petitioners can present the details sought to
be introduced in the original complaint by listing them as admitted facts. If
there are no admissions on these factual matters, then these details can be
proposed as stipulation of facts which will be scrutinized and discussed during
the pre-trial conference.
Again
in the pre-trial guidelines, the parties are required to use the different
modes of discovery and deposition under Rules 23, 25, 26, 27, and 28 within
five (5) days from the filing of the answer.[55] Petitioners can avail of written interrogatories
under Rule 25 to obtain information from respondents on the proposed amendments
or make use of the request for admission by adverse party under Rule 26 to
procure categorical answers under oath from the adverse party relating to the
alleged details.
Moreover,
the pre-trial brief has to identify all pieces of evidence to be presented
during trial whether parole, documentary, or object. These pieces of evidence
will certainly provide the details sought to be incorporated by petitioners in
their amended complaint.
Last
but not the least important, the judge during the pre-trial conference is
tasked to find out whether the pleadings especially the complaint and the
answer are in order. If not, then he can
order the amendments if necessary.[56] If petitioners can show to the satisfaction
of the court based on the pieces of evidence they intend to present that
amendments to their complaint are in order, then the judge would issue the
appropriate order for the amendment of the complaint. Unlike the bare allegations of petitioners in
the amended complaint, during pre-trial, the probability of having said
amendments accepted are greater in view of the presentation of the pieces of evidence
before the Court to support the proposed changes in the complaint. Thus,
everything is not lost on the proposed amendments to the initiatory pleading as
ample remedy is still available during the pre-trial. In this light, the resort to the writ of
certiorari is not justified.
No Forum Shopping and res judicata
Respondents Hernandez, Roxas, and the
PMO raise the issues of forum shopping and res judicata in their comments,
arguing that this petition be denied as petitioners are guilty of forum
shopping and that res judicata already applies. Said respondents allege
that the following cases were concealed by petitioners:
a. SEC Case No. 1690 and SEC Case No. 1708, Alex
Realty, Celso Fernandez, et al. vs.
Oriental Petroleum, Yao Shiong Shio,
et al.;
b. Civil Case
No. 55427, RTC-Pasig, Oriental Petroleum, Yao Shiong
Shio, Oscar Manuel, et al. vs. PCGG and Fr. Barcelon;
c. Civil
Case No. 88-14, RTC-Makati, Oriental Petroleum, Oscar Manuel, et al. vs. PCGG, Fr. Barcelon, et al.;
d. SEC Case No. 3325, Erlinda Matic, et al., on
behalf of Oriental Petroleum,
et al. vs. Fr. Barcelon, et al.;
e.
SEC Case BB No.
168 and PED Case No. 87-0339;
f.
SEC Case No. 3177
(CA-G.R. SP No. 15010), Oriental Petroleum,
Teodoro Hilado vs.
g.
SEC Case No. 00299, Simplicio Roxas, et al. vs. Oriental Petroleum, Yao Shiong Shio, Oscar Manuel,
et al.
As aptly countered by petitioners,
this issue has not been raised in a motion to dismiss in S.B. Case No. 0042
below. We therefore cannot entertain and
resolve this issue at this point as it is properly within the purview and
jurisdiction of respondent court SB to resolve.
Indeed, the instant petition only assails the denial of petitioners’
proposed amended complaint.
Moreover, even if we delve into this
issue, no pertinent and relevant parts of the records of the above enumerated
cases are presented to prove the existence of forum shopping or the application
of res judicata to bar S.B. Case No. 0042, and much less the instant
petition. The mere enumeration of the
cases in different fora, whether yet pending, resolved, or decided, cannot by
itself vest upon us the right to determine a violation of forum shopping or the
existence of res judicata without competent evidence of the relevant
portions of the official records thereof.
Finally, the fact that Civil Case
S.B. No. 0041 was dismissed or withdrawn upon the instance of some of petitioners
and the subsequent filing of the instant case in S.B. Case No. 0042 in lieu of the
other case cannot amount to forum
shopping, as the Rules allow the withdrawal of a complaint at the instance of
the plaintiffs who are not prejudiced thereby nor precluded from re-filing the
same case or substantially the same complaint absent any indication otherwise
in the order or approval of the dismissal or withdrawal of the complaint. Thus, Secs. 1 and 2 of Rule 17, 1997 Revised
Rules of Civil Procedure pertinently provide:
SECTION
1. Dismissal upon notice by plaintiff.––A
complaint may be dismissed by the plaintiff by filing a notice of dismissal at
any time before service of the answer or of a motion for summary judgment. Upon such notice being filed, the court shall
issue an order confirming the dismissal.
Unless otherwise stated in the notice, the dismissal is without
prejudice, except that a notice operates as an adjudication upon the merits
when filed by a plaintiff who has once dismissed in a competent court an action
based on or including the same claim.
SEC.
2. Dismissal upon motion of plaintiff.––Except
as provided in the preceding section, a complaint shall not be dismissed at the
plaintiff’s instance save upon approval of the court and upon such terms and
conditions as the court deems proper. If
a counterclaim has been pleaded by a defendant prior to the service upon him of
the plaintiff’s motion for dismissal, the dismissal shall be limited to the
complaint. The dismissal shall be
without prejudice to the right of the defendant to prosecute his counterclaim
in a separate action unless within fifteen (15) days from notice of the motion
he manifests his preference to have his counterclaim resolved in the same
action. Unless otherwise specified in
the order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be dismissed or
compromised without the approval of the court.
(Emphasis supplied.)
It is undisputed that on
PMO as party-litigant
Anent the issue of whether PMO vice
APT must continue to be a party-litigant, we agree with petitioners that PMO
has not shown that the assailed transfer of 1,004,230,000 shares of Oriental
stocks from PCGG has indeed been mooted.
PMO’s contention that it has returned the Oriental stocks transferred to
it by the PCGG pursuant to AO 241 is a mere self-serving assertion as no proof was
shown that indeed the questioned 1,004,230,000 shares of Oriental have been
returned to PCGG.
Dismissal of S.B. Case No. 0042 as regards respondent Hernandez,
Fugoso and Caguiat
In consonance with our determination
in and disposition of G.R. No. 101967, respondent Eduardo F. Hernandez must be
dropped as party-litigant in the instant case as he had no participation in the
conveyance of the 999 million Oriental shares.
In G.R. No. 101967, we found that:
The
records disclose that petitioner [Hernandez] did not participate at any time in
the execution of the contract of sale between PCGG represented by Ramon Diaz
and the Barcelon/Ultrana Group represented by F. Barcelon. The contract was duly executed and signed by
Ramon Diaz and Fr. Barcelon with PCGG director Jaime Ledesma as witness. The findings of the Ombudsman show that the
negotiations between PCGG and Barcelon were “secret” and that the Oriental
stockholders were not informed of the ongoing negotiations.
There is
no showing that petitioner Hernandez conspired and cooperated with the other
co-respondents. In fact as reflected in
the minutes of the board meeting of Oriental Corporation, when the sale was
brought to the attention of the board, Hernandez openly expressed his
opposition to the sale of the subject shares of stocks. (Annex B, Comment) The other directors were silent. The Oriental Board did not approve the sale.
x x x x
Petitioner
Hernandez was part time president for only one year from April 1986 to April
1987. When Oriental accepted the proceeds of the sale, Hernandez was no longer
a board member and Pedrosa was already the president. When the board of Oriental granted 100% stock
dividends to stockholders in 1987, Hernandez was neither President nor board
member.
Accordingly, S.B. Case No. 0042
should be dismissed as regards respondent Eduardo F. Hernandez.
In the Court’s February 14, 2005 Resolution,[57] we
dismissed the instant case with respect to respondent Valeriano Fugoso who died
on January 14, 2004. It is undisputed
that respondent Antonio Caguiat has likewise passed away per Compliance[58]
filed by petitioners informing the Court of respondent Caguiat’s demise. Thus, in line with our
WHEREFORE, the
petition is DISMISSED for lack of
merit, and the March 21, 1990 Resolution and May 12, 1998 Order of the SB First Division are hereby AFFIRMED. S.B. Case No. 0042 is DISMISSED with respect to respondents Eduardo F. Hernandez,
Valeriano Fugoso, and Antonio Caguiat. Let
the SB continue with the hearing and resolution of the case with dispatch. Costs against petitioners.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate
Justice
WE CONCUR:
Associate Justice
Chairperson
ANTONIO
T. CARPIO
CONCHITA CARPIO MORALES
Associate Justice Associate
Justice
Associate Justice
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
Pursuant to Section 13, Article
VIII of the Constitution, and the Division Chairperson’s Attestation, I certify
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
REYNATO
S. PUNO
Chief Justice
[1] Rollo, pp. 3-43.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19] Supra note 4.
[20] Rollo,
pp. 412-419.
[21]
[22]
[23] “Amending Administrative Order No. 43, S. of 1987, entitled ‘Authorizing the Asset Privatization Trust to Dispose Off Properties Recovered by the Presidential Commission on Good Government’ and for Other Purposes.”
[24] “An Act Extending the Term of the Committee on Privatization and the Asset Privatization Trust Amending for the Purpose Republic Act Numbered Seven Thousand One Hundred Eighty-One, as Amended” (1999).
[25] Rollo,
pp. 657-661.
[26] Sec. 16. Death of party; duty of counsel.––Whenever a party to a pending action dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of the fact thereof, and to give the name and address of his legal representative or representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice.
If no
legal representative is named by the counsel for the deceased party, or if the
one so named shall fail to appear within the specified period, the court may
order the opposing party, within a specified time, to procure the appointment
of an executor or administrator for the estate of the deceased and the latter
shall immediately appear for and on behalf of the deceased. The court charges in procuring such
appointment, if defrayed by the opposing party, may be recovered as costs.
[27] Rollo,
pp. 1113-1114.
[28]
[29]
[30]
[31]
[32] No.
L-30404,
[33]
[34] No. L-41543, July 19, 1982,115 SCRA 96.
[35] G.R.
No. 59582,
[36] No.
L-35098,
[37] Lerman
v. Reyes, et al., 103 Phil. 1027 (1958).
[38] Torres
v. Tomacruz, 49 Phil. 913 (1927).
[39] Guzman-Castillo
v. Court of Appeals, No. L-52008,
[40] Rollo, pp. 181-182. Par. 1.14 reads: Defendants John Does are persons presently unknown to plaintiffs who may have replaced some of the aforenamed individual defendants as directors and/or officers of plaintiff Oriental at the time of the filing of this amended complaint as well as all those who may succeed them as such directors and/or officers during the pendency of this suit, with offices at c/o Oriental Petroleum Corp., 7th Floor, Corinthian Plaza, Paseo de Roxas, Legaspi Village, Makati, Metro Manila.
[41]
[42]
2.01 In or
about September 1969, Jose Ma. Barcelon, Alfredo C. Ramos and Isidro Fojas
separately and individually applied, pursuant to the Petroleum Act of 1949, for
seventeen (17) petroleum concessions, comprising 1,319,132.26 hectares, in the
offshore areas of
2.02 On
x x x x
2.02.2 The incorporators were Jose
Ma. Barcelon, Alfredo Ramos, Vincent Recto and Felipe Cruz, as majority stockholders,
and Yao Shiong Shio and six (6) others as minority stockholders. Recto, Jose Ma. Barcelon and Ramos, the
Chairman, President and Treasurer, respectively, controlled the Board and
dictated important corporate actions, policies and decisions of Oriental.
2.03 In view of the magnitude and scale of the business which the company was to engage in, it was decided that it go public rot raise the required capitalization.
x x x x
2.03.02 On or about 24 March 1970, Oriental applied and was granted the right to publicly sell its shares in the stock exchange.
2.04 Sometime in January and February 1970, Jose Ma. Barcelon, Ramos and Fojas entered into separate exploration, exploitation and/or operating agreements with Oriental, covering their respective individual petroleum concession applications, whereby in consideration for Oriental’s granting each of them an option to buy 250 million shares of Oriental (exercisable within a period of 3 years) they waived any and all royalties and benefits that may be due them under the said concessions.
2.04.1 At this time, notwithstanding full compliance with all the legal requirements and the absence of any adverse claim or objection to the applications for petroleum concessions, the contracts of concession were not acted upon by the governmental authority concerned.
2.05 By then, Marcos had been well-entrenched in
power. “During his twenty years as
President of the
2.05.1 In the
2.05.2 In consequence of such threats and intimidation, Marcos unlawfully acquired one (1) billion shares of stock of Oriental, documented as follows:
x x x x
b) Second, the one (1) billion Class “B” shares were placed in the name of Star Management, a corporation controlled by Recto. Instead of a subscription agreement that required a 25% downpayment equivalent to P250,000.00 in cash and the balance payable on call of Oriental’s Board, a bill of sale was executed on 7 August 1970, between J.M. Barcelon & Co. and Star Management calling for only a downpayment of P100,000.00 and the balance within a one year period. While it was made to appear that Star Management paid P100,000.00, the money actually came from Oriental itself. First, it was made to appear in the records that Oriental paid Star Management P100,000.00 allegedly for services rendered, then Star Management paid Oriental the same P100,000.00 as downpayment. Thus, there was no valid consideration as there was in fact no intent that any consideration be paid at all.
x x x x
The above-described documentation was designed to conceal not only the interests of Marcos in Oriental but also the extortion perpetrated against Oriental
x x x x
2.07 Additionally, in 1971, Oriental also
undertook two (2) additional marine seismic surveys, the results of which led
Oriental to apply for eleven (11) petroleum exploration concessions totaling
about 668,000 hectares also in
x x x x
2.08.1 With the declaration of
Martial Law, the remaining 999 Million shares held by Star Management were
warehoused with Barcelon’s Ultrana Minerals, a company incorporated on
2.08.2. To document the transfer, a Deed of Conditional Sale was executed on 26 December 17972 by and between J.M. Barcelon & Co., Inc. as underwriter, and Ultrana, both companies controlled by Barcelon, in conjunction with the following fraudulent and fictitious transactions:
x x x x
Again, there was neither lawful consideration and/or payment nor the intent that valuable consideration be paid to Oriental although the Deed of Conditional Sale provides that Ultrana was obliged to pay the par value of these shares and states that Ultrana had made a downpayment of P100,000.00.
x x x x
2.08.3 Likewise, the Deed of
Conditional Sale (Annex “C”) gave Ultrana one (1) year or up to
2.09 On
2.09.1 In the morning of 21
February 1976,
2.09.2 To prevent Marcos from grabbing all of the unsubscribed shares of Oriental, Yao, Cruz, Ramos and the other directors agreed to have 800 million of the aforementioned shares allocated to the directors, officers and employees of Oriental in recognition of their loyalty and in compensation for their financial sacrifices in the company through its dark yeas from 1971 to 1976.
2.09.3 On
x x x x
To date, plaintiffs are not informed where the 150 million shares of the 2 Billion unsubscribed shares went, but Marcos got only 1.85 billion.
2.09.4 During the 10 March 1976 meeting, Recto also advised the Board that Gen. Ver had called to inform him that their lawyers had been instructed to coordinate with the lawyers of Oriental and J.M. Barcelon & Co. (the underwriter) for the documentation of the transfer.
The Oriental shares were then quoted at 10 to 15 centavos in the stock
market and
2.10 To give the illegal acquisition of the shares a semblance of regularity, the following simulated transfers of the 999 million shares (last held by Ultrana) and the 1.85 Billion shares were effected. These were done pursuant to instructions by Marcos through his agents sometime in March 1976. Thus, to make it appear that these transactions were all done and executed before the oil strike of 1976, the following documents were made, to wit:
2.10.1. Re: 999 Million Ultrana shares
i) It was made to appear, contrary to the truth, that on or about 29 January 1974 or 31 days after the expiration of the period for Ultrana to pay the balance of P9.8 Million which expired on 29 December 1973, Ultrana had requested Oriental for extension of the period for payment up to 24 December 1974 and had sought permission in the interim to transfer its subscription rights thereon to Campos, Recto and Cesar Zalamea who are known Marcos cronies.
ii) It was also made to appear, contrary to the truth, that on 25 November 1975, Campos, Zalamea and Recto had waived their rights on the 999 million Ultrana shares and instead had requested that the shares be transferred to Independent Realty and Recto as aforesaid allegedly in consideration for a downpayment of 25% of the par value of those shares.
iii) Lastly, it was made to appear, contrary to the truth, that it was after the oil strike, specifically on 16 March 1976, that Ultrana assigned its 999 million shares to Independent Realty and Recto.
Presently, only 162 million shares remain from that first block of shares, now in the name of Independent Realty.
2.10.2 Re: 1.85 Billion Shares
i) It was made to appear, contrary to the truth, that on 26 November 1975, Oriental approved the offer of Performance Investment, Mid-Pasig and Fabian Ver to acquire 1.85 billion Oriental shares at par supposedly because Oriental needed working capital for its Reed Bank project, which capital allegedly could not be raised by selling Oriental’s Class “B” shares since these shares were at that time allegedly selling at below par. The actual fact is that these shares were acquired through extortion by Marcos after the oil strike in 1976 and that the corporation did not receive any payment for their full value.
ii) It was made to appear,
contrary to the truth, that Oriental as early as
iii) The deed for Gen. Ver was
dated November 1975 but acknowledged only on
Some undated subscription agreement between Oriental and Performance
Investment Corporation covering 1 billion shares prepared in March 1976 upon
the direction of Recto subsequently appeared to have been antedated to
iv) The aforesaid documents covering Marcos’ acquisition of the 1.85 billion shares, although made in 1976 were antedated to 1974 or 1975 and were all executed under coercion and/or duress.
v) To date, the first and second blocks of shares are accounted for as follows:
x x x x
2.11 Plaintiffs’ participation in the aforesaid acts were done as aforestated under compulsion and/or duress.
2.12 Re: Piedras Shares
i) Sometime in December 1978,
Marcos directed Recto to exchange a 2.5% interest in Service Contract No. 14
with 2.5 billion shares of Oriental. All
shares in Oriental having been fully subscribed at the time, Marcos ordered
Recto to increase Oriental’s capitalization to P125 million by issuing 2.5
billion new shares. On
ii) Anticipating that the shareholders would question the exchange, since Oriental shares were then being traded at above par value, defendant Hernandez sought an opinion from the Securities and Exchange Commission (“SEC”) as to the question of preemptive rights.
iii) On
iv) At the 1979 stockholders’ meeting, the Board and management were subjected to a lot of questions regarding, among others, the identity of the mysterious owner of the 2.5% interest represented by Rolando C. Gapud, the economics of the swap and the SEC opinion on preemptive rights. Thereafter, several minority stockholders filed a suit with the SEC questioning the matters taken up during the meeting. Subsequently, the SEC ruled in favor of Oriental and the exchange of the 2.5% in Service Contract No. 14 for 2.5 billion shares was affected.
Piedras
Petroleum was identified as the mysterious owner of the 2.5% interest. On
2.12.1 The aforementioned Piedras
transactions were clearly in derogation of law.
Not only were these transactions unilaterally imposed upon Oriental, it
appears, moreover, that the 2.5% interest in Service Contract No. 14 in
exchange for which the 2.5 billion new shares were transferred to Piedras
Petroleum, belonged to the government which were transferred to Piedras
Petroleum without any lawful consideration.
The PCGG later recognized the infirmity of the Piedras transactions, as
stated in its letter to Oriental dated
2.12.2 However, the PCGG’s decision, per its letter to Oriental dated 18 March 1987, effect mutual restitution between the Government and Oriental, has remained unimplemented on the flimsy excuse that the PCGG would, as represented by defendant Hernandez, lose P6 Million instead of gaining from such restitution. In reality, however, the PCGG’s refusal was merely a ploy to further perpetuate the PCGG’s control of Oriental.
2.12.3 Over the years, Piedras has likewise received substantial cash dividends.
2.13 Piedras acquisition of 2.5 billion Oriental shares in exchange for the 2.5% interest of the government in Service Contract No. 14 is an illegal transaction, since Piedras illegally acquired the aforesaid shares of the government.
x x x x
2.14.1 Presently, these shares constitute around 36% shares of the capital stock of Oriental sufficient to perpetuate the PCGG and its nominees or confederates’ control of Oriental.
2.14.2 Plaintiffs cannot be estopped from asserting their rights and recovering the aforesaid shares taken form them through extortion, since estoppel is to be applied only against wrongdoers, not against the victims of the wrong.
x x x x
2.17 On the basis of a letter report dated April 9, 1986 by Barcelon to then PCGG Chairman Salonga, x x x
2.17.1 x x x This was after
Minister Salonga received E. Barcelon’s
x x x x
2.20 x x x x
On 13 April 1987, the PCGG advised Oriental that it would vote 4.7 billion sequestered shares during the 30 April 1987 meeting, “pending final adjudication by the Sandiganbayan of the ownership and disposition of the aforesaid sequestered shares.”
x x x x
2.20.2 On 2 August 1987, the sequestration orders of the PCGG covering the shares in Oriental were automatically lifted, by virtue of Section 26, Article XVIII of the 1987 Constitution, x x x
x x x x
b) Now, PCGG claims, that by virtue of the affidavit of J.Y. Campos, it has become the owner of the shares.
[43]
The proposed insertion in par. 3.05 reads: x x x Additionally, Oriental is unduly deprived of its property which it intends to sell at market value to finance its present operations. x x x
The proposed insertion in par. 3.07 reads: x x x and belatedly, J.Y. Campos’ affidavit which did vest ownership in the PCGG or the Government.
[44]
[45]
4.06 The PCGG’s claim of dominion over the shares
on the basis of the
a) The affidavit did not transfer ownership of the Oriental shares to the PCGG or the Government.
b)
[46]
[47]
[48]
7.04. In fact, since its creation in 1986, the PCGG
has consistently maintained that Marcos, from the early years of his
presidency, had “confiscated businesses” and taken “undue advantage of his
powers as President” to accumulate ill-gotten wealth in all forms of businesses
in the Philippines including all or substantially all oil companies in the
Philippines. This position is evident in the pleadings of the Government on
file with this Honorable Court in the various ill-gotten wealth cases filed by
it and recently in its RICO case against Marcos in the
[49]
[51] I F. Regalado, Remedial Law Compendium 169-170 (9th revised ed., 2005).
[52]
Santiago Land Development Co. v. CA, G.R. No. 103922,
[53] Tribiana v. Tribiana, G.R. No. 137359, 13 September 2004, 438
SCRA 216.
[57] Supra note 30.
[58] Rollo,
pp. 582-583.